Hayne Report Summary - without the jargon and my two cents
68 days of evidence, over 10,000 public submissions has amounted into 76 recommendations by Commissioner Kenneth Hayne. The Federal Government said it would act on all of them.
Here is a summary of some of the recommendations out of the Hayne Report, without the jargon:
Home Loans: People wanting a home loan will pay the mortgage broker directly (rather than the banks paying the broker). This ensures that the broker will always act in your best interest as opposed to whichever bank/institution gives them the best deal.
Ongoing advice fees: Advisors and financial institutions need to write to clients every year to let them know how much they're being charged and for what services (rather than it automatically getting deducted without specific value outlined).
Super: One default super fund, automatic consolidation of random small super fund accounts and capping of charges by super funds.
Farmers: Aussie Farmers affected by natural disaster will have their default interest charges dropped and additional help/counselling provided to those farmers in debt.
Poor english: Those with poor English skills supported with increase in the accessibility of banking.
More regulation: Greater oversight & regulation of previously unregulated products and the regulators (ASIC and APRA) will be reviewed by an independent authority
Culture: All financial institutions need to review REM (annually), culture & governance
My two cents…
In my view, having a strong & healthy banking sector is incredibly important to all Australians. Most of us are beneficiaries of the banks’ service either through products we use day to day - or through investments & almost always in our super/retirement funds.
Unfortunately in any large company (~150,000 people work for the Australian banks) you will get some bad eggs - and also some missed processes - this is absolutely no excuse, there needs to be better oversight & remediation. The commission served a positive purpose in bringing these to light.
Not withstanding some of the specific targets, from the outset, the recommendations seem very fair, reasonable and in the customers’ best interests and I have no doubt that all banks are taking the recommendations on board and continuously trying to be better and do better for customers.
My hope is that the outcomes do not engender moral hazard that will create a greater negative consequence for all Australians. I guess only time will tell…
I welcome your thoughts.